Nissan Motor CEO Makoto Uchida, left, and Honda Motor CEO Toshihiro Mibe attend a joint press conference in Tokyo, March 15. AP-Yonhap

The possible merger between Honda Motor and Nissan Motor has raised concerns for Hyundai Motor Group, as the combined entity could manufacture more price-competitive and highly commercial vehicles by cutting unnecessary research costs, experts and industry officials said Thursday.

Hyundai Motor Group is the world's third-largest carmaker by vehicle sales as of 2023, but the position could be threatened by the potential combination of the two Japanese legacy carmakers.

According to data from MarkLines, an auto market tracker, Hyundai Motor Group sold some 7.3 million new vehicles last year, ranking third behind Toyota and Volkswagen.

However, considering the combined sales of Honda and Nissan, which totaled 7.35 million during the same period, Hyundai could be pushed down to fourth place.

Industry experts said the merger of the two Japanese carmakers will pose a long-term threat to Hyundai.

"One of the key upsides from the merger is that both carmakers can save their research and development costs by sharing production platforms for vehicles in the similar segment," said Lee Ho-geun, an automotive engineering professor at Daedeok University.

But this does not mean the Korean carmaker is facing any immediate threat, as the company's brand value remains strong and customers are unlikely to suddenly change their preferences due to the merger, according to Lee.

"However, the two Japanese carmakers will be able to achieve economies of scale on a long-term perspective after their combination, which can help them cut costs for research as well as production," he said.

Industry officials said the latest move looks to have come amid a rapidly changing global mobility paradigm shift with the rise of electric vehicles (EV) and Chinese rivals.

Hyundai Motor Group Executive Chair Chung Euisun, left, shakes hands with Toyota Motor Chairman Akio Toyoda during the World Rally Championship Japan at Toyota Stadium in Japan, Nov. 24. Courtesy of Hyundai Motor Group

In March, Honda and Nissan reached an agreement to team up on EVs.

"The rise of Tesla and some Chinese EV markers, such as BYD, may have sent alarm bells to the carmakers," an industry official said. "Electrification is the biggest paradigm in the global car industry, but Japanese firms have made few outstanding achievements in their EV business so far."

But some others dismissed the possibility that the merger of Honda and Nissan poses any serious threat to Hyundai Motor Group or other top-tier carmakers, such as Toyota and Volkswagen.

"For instance, Stellantis Group operates 14 brands after its launch in 2021, but the global auto group has not displayed any threatening influence to other legacy carmakers," said Kim Pil-soo, an automotive technology professor at Daelim University College.

"Against a similar backdrop, the merger between Honda and Nissan will not send any serious shockwaves to major players, such as Hyundai Motor, as the combination is a sum of two minor carmakers."

The professor also pointed to the conservative nature of Japanese firms as another key downside even after the merger of the two firms.

"Unlike Hyundai Motor Group, the two Japanese carmakers remain less open to global initiatives, which will delay robust expansions into the global territory even after a merger," Kim said.